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Suppose I place a limit buy order at $10.00 per share for company XYZ on the NYSE or Nasdaq, while the spot price is say $10.25. If my limit order subsequently executes (whether 5 minutes later or 5 days later), does that necessarily imply the spot ask price must have reached $10.00 per share, if even for a brief moment? Or is it possible for such an order to execute independent (to a degree) of current spot prices?

Edit: if I'm using any terminology incorrectly please advise.

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Yes, limit order gets executed only at the limit price specified. If you can see the details, it might show the gradual fulfillment of your order if the whole cannot be fulfilled at the same time. –  DumbCoder Mar 14 '11 at 10:30
    
"does that necessarily imply the spot ask price must have reached $10.00 per share"...I think you mean "$10.00 per share or less" –  Victor123 Jan 21 at 3:05
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2 Answers

Think of all the limit orders waiting in line, first organized by price, and then by the time the order was placed (earlier orders are closer to the front of the line). In order for your buy order to trade, there must be no other limit orders of 10.01 or higher, or the sellers order would have matched with them instead. So once your order is filled, the price is 10.00, even if just for a millisecond, because there was a trade at 10.00, even though the price might go right back up after the trade.

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I can't say I know everything about the underlying details, but from what I understand, your limit buy adds to the bid side of open orders, and one possibility is that someone placed a market order to sell when the bid price for the stock fell to $10 which was matched to your open limit order.

So using your terminology, I would say the spot bid price is what fell to $10, even if for a brief moment.

Whether or not it is possible for your order to be filled when the limit buy price is deeper than the current bid price is beyond me. It may have something to do with lot sizes.

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If someone placed a large market order when spot was $10.25, part of the order could easily be filled at below the current spot bid (it would be a "book bid"/limit order, but not a spot bid). –  barrycarter Mar 13 '11 at 1:53
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